Dealing with the Credit Crunch
Tight management of existing resources was the theme when panelists addressed the financial crisis. Dynegy’s current focus is on "liquidity, costs, and operating well." But Williamson expressed confidence that, "as the economy comes back, energy demand will come back."
Edison Mission Group, a primarily coal-fired independent power producer, is in "a cash preservation mode," yet it is looking to diversify into renewables and integrating biomass into coal plants as well as pursuing demand-side management, Litzinger said. His company faces very high investments in environmental controls and uncertainty about the price of carbon. EMG’s approach to this challenge is "technical innovation and changing mindsets," which includes exploring selective noncatalytic reduction for larger, older coal plants that remain economic to run.
Exelon’s nuclear fleet used to be inefficient, Crane noted, but now fleetwide capacity factor is over 93%. His company is also looking at transmission system efficiencies. "Looking forward, we need to continue to find growth opportunities," he said, but noted that new nuclear development "is very difficult" because of liquidity problems and gas markets.
Policy Uncertainty
In addition to the usual hoops that nukes have to jump through (including financial viability and public acceptance of a proposed site), Crane noted that today there are new uncertainties:
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Regulatory uncertainty: The industry is getting mixed signals from various administration officials about nuclear power.
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Leadership uncertainty: The industry is waiting to see who the new Nuclear Regulatory Commission chief will be.
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Waste disposition uncertainty: The industry needs to know what path the federal government will take with regard to spent fuel, especially now that the Yucca Mountain repository is officially dead.
Multiple panelists hoped that the country would soon see a comprehensive, sensible energy policy. When an audience member asked if there were anything that the U.S. could learn from energy policy models in other countries, the answer was no — with various explanations appended.
Morris pointed to France choosing nuclear in the middle of the previous century because its next best option was sourcing coal from Germany, and to the EU, which is leaning toward liquefied natural gas because Russian natural gas supplies are unreliable. Japan marries nuclear power and energy conservation, "but these models don’t work in the U.S.," he said. "Americans react to financial incentives almost exclusively." (Coal provides 73% of AEP’s generation capacity.)
Based on his familiarity with power projects in Asia and Europe that his company previously operated, Litzinger concluded that "power policy is easier to do in smaller countries."
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